Bankruptcy and debt consolidation both are tools to remove your debt.
The key thing to keep in mind is that each option has a diverse impact on your credit score. It would be wise to make your familiar on advantages as well as disadvantages of both:
1) Bankruptcy provides temporary relief.
Once you file for bankruptcy you are free from annoying phone calls, etc.
The main objective of bankruptcy is the liberation of nearly all of your debts. The release cleans a variety of unsecured liabilities like credit card debts. Once you get discharge you are free from all sorts of debt.
The largest drawback of bankruptcy is that it will impact your credit score. It will take several years to clean the bankruptcy tag from your credit report.
This effectively means you will not be eligible for cheaper interest loans and might end up paying higher interest for loans.
Secondly, by filing bankruptcy your financial records will no longer be secret and it will be easily accessible by the general public.
2) Why you must opt for Debt Consolidation?
When you opt for debt consolidation you have the advantage of combining all your debts into single debt management program.
This will lower your interest rate making the debt more attractive.
Secondly, you don’t have to pay several companies since you have opted for debt consolidation.
You only have to pay the consolidation company thus saving yourself a headache with dealing with various companies.
The most important advantage is that you will be saved from late fees since you have to pay a single company at the specified date.
Opting for debt consolidation will also positively impact your credit score.
Hence debt consolidation is the simpler alternative to filing bankruptcy which threatens to wipe your credit score making it even more difficult for you to negotiate further loans.